Evidence of meeting #38 for Government Operations and Estimates in the 41st Parliament, 1st session. (The original version is on Parliament’s site, as are the minutes.) The winning word was senate.
A recording is available from Parliament.
Liberal
John McCallum Liberal Markham—Unionville, ON
Thank you.
Thank you, Mr. McGee.
One of the things that drew our attention to New Zealand was this business of dividing up the spending by output area or policy area, which I thought was interesting. But when you said those policy areas frequently coincide with departments, it sounded as if maybe it's not that different from what we do after all. Is that basically the system?
You said there were many categories. Approximately how many output areas or policy areas would there be to vote upon?
New Zealand's Parliamentary Ombudsman, As an Individual
There are about 40 votes in total each year to vote upon, which is not very different from the number of departments we have. Each of those vote areas might include three or four output classes within them. In some cases there may be only one output class, depending upon the size of the vote that's being considered.
There is a general tendency, as a treasury policy, to try to cut down the number of output classes and confine the expenditure approval to the overall vote, and going on from that I think is a treasury attempt to try to cut down the number of votes.
Liberal
John McCallum Liberal Markham—Unionville, ON
Would you say that your output system, votes based on output, is better than a departmental system?
New Zealand's Parliamentary Ombudsman, As an Individual
I think it makes more sense. I think there must be a natural tendency for the two to grow together. After all, if one defines a particular output that the public sector needs to produce, then there is a presumption in a sense that it will be produced by a particular department.
The two ought to grow together. There's no point in having a department if it isn't producing outputs that anybody desires. The two do tend to march in step.
I think it makes sense to focus on what one wants to see produced by the public sector, rather than the institutions that are already doing the producing and therefore keeping themselves in business, whether they're producing anything useful or not.
Liberal
John McCallum Liberal Markham—Unionville, ON
I certainly agree with that.
I would turn now to timing. Whereas in Canada the main estimates do not include measures announced in the previous budget, it's my understanding that they do in New Zealand. Is that correct?
New Zealand's Parliamentary Ombudsman, As an Individual
They do. Major policy announcements made in the budget will include expenditure to implement those policy announcements if the planning has proceeded far enough to enable that to be done. If it hasn't, the announcement might be made in the budget but a supplementary estimate will be presented to the Parliament later in the financial year to give the financial authority for what has been announced in the budget. It's a combination of the two, really.
Liberal
John McCallum Liberal Markham—Unionville, ON
A lot of people have suggested that we should move to a system where, as much as possible, the main estimates also include budgetary measures. One of the possible objections that is sometimes raised in Canada is budget secrecy. If you have hordes of civil servants working on translating budget measures into estimates before the budget is presented, then the risk of a leak would seem to increase quite substantially.
Do you think that is an issue?
New Zealand's Parliamentary Ombudsman, As an Individual
I think budget secrecy is overstated as an impediment. I think what budget secrecy is intended to do is to protect against anybody learning what policy is being proposed and then cashing in on it by speculating in a way that is effectively fraudulent on insider knowledge. I certainly don't agree with any insider knowledge being given to anybody, but there's no reason governments shouldn't announce to the world what they're thinking about doing. And increasingly governments are doing this.
As long as everybody knows at the same time, there can't be any objection from a budget secrecy point of view to the fact that a particular policy is being considered and then an outline given to the community about what is under consideration. I think budget secrecy in the past has been overstated, and I think it's breaking down. I think it's a good thing that it is breaking down.
Liberal
John McCallum Liberal Markham—Unionville, ON
Well, I certainly remember past budgets in this country being released on each of the seven days preceding the budget, in terms of major initiatives. So I think that has happened to a large degree here as well.
Is my time over?
NDP
The Chair NDP Pat Martin
Thank you, Mr. McGee.
That pretty well concludes the amount of time we have. I want to say on behalf of the committee how very much we appreciate your coming in at that very early hour down in Godzone. We feel very lucky that you have shared both your experience and your expertise with us today. We found it very useful and very interesting.
On behalf of all the committee members, thank you so much, sir, for coming in to be with us today.
New Zealand's Parliamentary Ombudsman, As an Individual
Thank you for inviting me. I've enjoyed the experience.
NDP
The Chair NDP Pat Martin
I'm going to suspend the meeting for about five minutes while we convert over to our next witness.
NDP
The Chair NDP Pat Martin
Ladies and gentlemen, we will reconvene our meeting, the 38th meeting of the Standing Committee on Government Operations and Estimates, and continue our examination of the process of estimates.
We're very pleased to welcome our next witness by the magic of teleconferencing, Mr. Harry Evans, former Clerk of the Australian Senate.
You are very welcome, and we very much appreciate your coming in at such an hour, sir, to share with us some of the experience of our friends in your country in dealing with the estimate process properly.
We have about only 45 minutes to share together, sir. Usually we ask for opening remarks of perhaps five or ten minutes. That would leave committee members—it's an all-party committee, of course—an opportunity to ask you questions.
Having said that, Mr. Evans, the floor is yours. Welcome.
Harry Evans Former Clerk of the Australian Senate, As an Individual
Thank you, Mr. Chairman.
Perhaps I could give a quick rundown of what happens with estimates here.
The annual appropriation bills are introduced to the House of Representatives in May, with additional appropriation bills in February. In the House of Representatives they go through the normal stages of a bill, including a committee-of-the-whole stage, in which members can ask questions of ministers.
In the Senate it's more elaborate. At the same time as the bills are introduced, the estimates are tabled in the Senate. The estimates are the subject of very detailed explanatory notes presented by each department. Those notes include other expenditure outside the annual appropriation bills, and that expenditure is open for examination.
The estimates are referred in the Senate to eight standing committees, which are subject-specialized committees, according to their subjects. They hold estimates hearings in May, with main estimates hearings of two weeks. They hold supplementary estimates hearings in November, in which they follow up on matters that arose in the May hearings. Then they hold hearings in February on the additional estimates.
In the hearings, all activities of departments are open for examination. They don't talk about estimates, as such. They talk about activities of departments, what departments are doing and why, and all those activities of departments are open for examination. There's a resolution in the Senate that says any questions going into the activities of departments and their financial positions are relevant questions.
Sometimes the hearings are fairly partisan and controversial. They concentrate on controversial matters, government programs that are alleged to be wasteful or inefficient, and so on. You get non-government senators asking very penetrating questions. Government senators are briefed to defend their ministers and their departments.
For the most part, the hearings concentrate on detailed examination of departments' activities and what they are doing, and why. Public servants from the various departments appear, and Senate ministers sit in on the hearings with those public servants. Each Senate minister represents a number of their ministerial colleagues in the House of Representatives. They are, theoretically anyway, briefed to take questions on any of the activities of those ministries. Of course when the discussion gets fairly political and concentrates on policy matters, the ministers are there to take the questions.
Under a rule of the Senate, public servants are allowed to take questions on notice and to answer the questions in writing, and also to refer questions to their superior officers and to ministers.
What does everybody get out of this process? A vast amount of information comes out that is not otherwise available. The press pays great attention to estimates hearings, and there are extensive reports in the press of information that comes out that would not otherwise be available.
Senators get better informed about the activities of departments, and ministers get much better informed as well. Ministers have said to me on many occasions that sitting through estimates hearings is a good way of finding out what their own departments are doing. Ministers are better informed as a result.
That's briefly how the process works.
NDP
The Chair NDP Pat Martin
That's very useful, Mr. Evans.
Given the shortness of time, we will go right into rounds of questioning. The first questions will be from the New Democratic Party, the official opposition.
We'll start with Mr. Denis Blanchette. Denis, you have five minutes.
NDP
Denis Blanchette NDP Louis-Hébert, QC
Thank you, Mr. Chair.
Mr. Evans, thank you for helping us do our job better.
You seem to have a highly developed system of hearings in your country. You said that the ministers understand their own budget better. Do the members generally have a good understanding of the estimates? I am talking about the members of the various committees that examine them. Do members in your country currently have a hard time understanding what they are approving?
Former Clerk of the Australian Senate, As an Individual
Sometimes they do, indeed, yes. They have to improve their understanding by asking questions. That's the whole purpose of the process, because there are things they don't understand, and it's the job of the public servants to make sure that they do understand them as much as possible.
A lot of things in departments remain mysterious, as you can well imagine, but I am quite sure that the Senate has a far better understanding of how departments work as a result of this process.
NDP
Denis Blanchette NDP Louis-Hébert, QC
Regarding the support provided for parliamentarians in your country, how is that support organized so that parliamentarians can do their job properly and quickly understand the masses of data they receive?
Former Clerk of the Australian Senate, As an Individual
Each member of Parliament, each senator, has his or her own research staff. They also have research staff attached to their parties. Before the estimates hearings, those research staff do a lot of work preparing material for the senators. The committees also have their non-partisan permanent staff, and they're available to assist the senators in understanding the estimates and in formulating lines of inquiry.
Those staff are able to contact departments to clarify matters with departments beforehand and to signal to departments the matters they're going to be questioned on. Through that process, senators have a good deal of support and should be well prepared when they come to the estimates hearings.
NDP
Denis Blanchette NDP Louis-Hébert, QC
Let us talk about accountability. With estimates or a budget, we eventually want to see whether the objectives that were set are being met.
Does your country have the equivalent of what we have here? Is it always the same people who oversee the preparation of the budget estimates and the examination of the public accounts, the annual reports, or is it different groups? How is this examination designed so that new estimates can be properly scrutinized?
Former Clerk of the Australian Senate, As an Individual
Apart from these committees and the staff who work on the estimates, the estimates and the explanatory notes of the departments are subjected to scrutiny by a large number of other people and bodies.
There is a public accounts committee, a joint committee on public accounts, which does the technical scrutiny of public accounts and reports regularly on them. They are assisted by the Auditor General, who audits the public accounts and does performance audits that look particularly at the performance of departments.
The Auditor General and the reports of his office are available to the estimates hearings and the senators in the estimates hearings. Audit reports provide one basis for questioning at estimates hearings.
There is a good deal of focus on the performance of departments and the effectiveness of programs.
NDP
Denis Blanchette NDP Louis-Hébert, QC
You spoke about a detailed examination of departments' activities. In our committee, we wonder in how much detail we can study the figures.
In Australia, do parliamentarians conduct a very detailed examination, or is it more of an overview of all activities? How do parliamentarians react to this level of scrutiny?
Former Clerk of the Australian Senate, As an Individual
The explanatory notes the departments provide are very detailed.
Obviously, senators focus on things that are of interest to them, and those matters of interest are very often politically selected. They're the things that are controversial. They are the things there is political controversy about. Public servants sometimes complain that senators pass over programs costing millions and look at programs costing mere thousands, but that is because the thousands are controversial and difficult, and the programs costing millions are well understood and don't involve controversy and difficulty. There is a focus on the matters that cause difficulty and controversy, certainly.
The capacity is there for senators to go fairly deeply into programs they're interested in.